Correlation Between Jeil Steel and IQuest

Can any of the company-specific risk be diversified away by investing in both Jeil Steel and IQuest at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jeil Steel and IQuest into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jeil Steel Mfg and IQuest Co, you can compare the effects of market volatilities on Jeil Steel and IQuest and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Jeil Steel with a short position of IQuest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeil Steel and IQuest.

Diversification Opportunities for Jeil Steel and IQuest

-0.2

Correlation Coefficient

Jeil Steel  IQuest

Good diversification

The 3 months correlation between Jeil and IQuest is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jeil Steel Mfg and IQuest Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQuest and Jeil Steel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Jeil Steel Mfg are associated (or correlated) with IQuest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQuest has no effect on the direction of Jeil Steel i.e., Jeil Steel and IQuest go up and down completely randomly.

Pair Corralation between Jeil Steel and IQuest

Assuming the 90 days trading horizon Jeil Steel is expected to generate 13.52 times less return on investment than IQuest. In addition to that, Jeil Steel is 1.62 times more volatile than IQuest Co. It trades about 0.0 of its total potential returns per unit of risk. IQuest Co is currently generating about 0.04 per unit of volatility. If you would invest  232,052  in IQuest Co on December 1, 2024 and sell it today you would earn a total of  7,948  from holding IQuest Co or generate 3.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Jeil Steel Mfg  vs.  IQuest Co

Jeil Steel Mfg

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jeil Steel Mfg has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Jeil Steel is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

IQuest

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in IQuest Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, IQuest is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jeil Steel and IQuest

The main advantage of trading using opposite Jeil Steel and IQuest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeil Steel position performs unexpectedly, IQuest can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IQuest will offset losses from the drop in IQuest's long position.

The idea behind Jeil Steel Mfg and IQuest Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.